ATandT Buys Spectrum from Qualcomm for Planned 4G LTE Network

By Michelle Maisto |
Posted 2010-12-20

AT&T took a step closer to its planned deployment of a 4G LTE
(long-term evolution) network Dec. 20 by agreeing to purchase spectrum
licenses in the lower 700MHz frequency band from Qualcomm for $1.93
billion. AT&T said in a statement that it plans to deploy the
spectrum as "supplemental downlink using carrier aggregation
technology," and that the move will bolster its ability to "provide an
advanced 4G mobile broadband experience for its customers in the years
ahead."

The spectrum currently covers more than 300 million people
nationwide-more than 70 million of whom are in such major markets as
New York, Boston, Philadelphia, Los Angeles and San Francisco. Qualcomm
currently uses the licenses to support its FLO TV business, which the
company says it will reevaluate and probably shut down in March.

"This technology is designed to deliver substantial capacity gains and
is expected to be enabled with the completion of 3GPP [3rd Generation
Partnership Project] Release 10," AT&T said in the statement,
adding that it "expects to begin deploying this spectrum once
compatible handsets and network equipment are developed."

In a separate statement, Qualcomm said that it will integrate the
carrier aggregation technology into its chipset roadmap and sell the
technology worldwide. The technology enables wireless operators to use
unpaired spectrum bands in conjunction with existing paired bands, to
make "substantial" improvements to their mobile broadband networks.

"This is a positive outcome for Qualcomm and our stakeholders," Paul
Jacobs, chairman and CEO of Qualcomm, said in the statement. "Carrier
aggregation, supplemental downlink and LTE multicast technologies are
an exciting evolution of next-generation wireless systems to
economically support increasing consumer demand for mobile TV and other
rich media content."

AT&T is currently upgrading its HSPA 7.2 network to HSPA+ technology,
before rolling out LTE in 2011. For now, it's the only top-four U.S.
carrier not offering access to 4G technology. Sprint offers WiMAX-based
4G through Clearwire, which it owns a majority share of, and has lately
enjoyed some unprecedented success, thanks to the two smartphones-the
HTC Evo 4G and Samsung Epic 4G-that it offers to take advantage of it
4G coverage areas.

In early November, T-Mobile launched an ad campaign branding it
"America's Largest 4G Network" and introducing a 4G-enabled smartphone,
the myTouch 4G, as well as the 4G-enabled Dell Inspiron Mini 10
netbook. While the network is based on HSPA+, T-Mobile CEO Neville Ray has said that it offers speeds that "match and often beat WiMAX and are readily comparable to what early LTE will deliver."

Following in early December, Verizon Wireless-the nation's largest
network, which is widely expected to gain the additional burden on its
network of supporting an iPhone early in 2011-switched on its LTE-based
4G network. Currently covering 38 cities and 60 commercial airports,
executives have described the effort as "just the beginning."

(Highlighting just how close to the beginning it is, within days
customers were experiencing problems with the hand-off between 3G and
4G-an issue Verizon acknowledged and is presumably working to remedy.)

The deal between Qualcomm and AT&T is still subject to regulatory
approvals and other closing conditions, but the pair said they
anticipate that the sale will officially close during the second half
of 2011.